I recognize that this is an old thread, but the answer provided by d138 should be corrected.

Dark Pools are subject to the provisions set forth in both Reg NMS and Reg ATS.

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Agreed, dark pools are subject to both regulations. But while they may be filling at the mid and price improving, the problem is that they can report trades late which show up in the tape and can confuse some investors since the trade prices don't align with the current trade price.

Not to mention the added market segmentation of an already overly segmented market.

Agreed, dark pools are subject to both regulations. But while they may be filling at the mid and price improving, the problem is that they can report trades late which show up in the tape and can confuse some investors since the trade prices don't align with the current trade price.

Not to mention the added market segmentation of an already overly segmented market.

More...

Good point. If I understand correctly, an ATS is supposed to report the original execution time, price, and other details within 10 seconds of the trade.

Here's a new report regarding current regulations, conflicts of interest, segmentation, and other concerns regarding dark pools.

Broker-dealers who route orders, operate an ATS and have a proprietary trading desk are fulfilling the holy trinity of conflicts of interest. Their order routing operation is incentivized to route orders to the ATS to reduce fees, and as volume increases in both the ATS and order routing operations, it becomes mutually beneficial (regardless of the quality of those executions to long-term investors). Their proprietary trading operation stands at odds with both of these “agency” responsibilities, and can lead to practices such as co-location/ cross-connects into the ATS, and adoption of slower technology within the ATS that can increase profits for some aggressive high-speed traders at the expense of long-term investors. Investors should know about any ATS features that could be used by proprietary trading systems or that may only be available to the broker’s order routing systems. Our ATS Questionnaire includes a section specifically designed to allow non-independent ATSs to disclose such operations. However, we are extremely skeptical that these conflicts of interest may be cured by mere disclosure.